IndustryWeek Summit (Education)

Nov. 20, 1998, Washington, D.C.

DONOHUE:: Large companies. Small companies. Well, I learned that at the Chamber. I learned it big time at the trucking industry and I'm back here and here is the simple argument we make. Large companies have resources. Intellectual and program resources and they have money. Small companies have serious political clout, if they can be educated and organized. Together, they do much better than large companies by themselves or small companies by themselves. There are not many great differences in issues. Oh, there are some different spins. You might remember the product liability thing when it began to become just for the small companies. A lot of big guys got nervous only because would this preclude them in the future. That doesn't play with everybody. But it plays with enough folks. But what it really plays with, it is true on the Hill. I mean, I have looked more large companies in the face and said you think the Congress cares about your problem in that regard when you are a $52 billion company. Go get eight guys that run $4 million dollar companies and take them in there and you will get it done. I mean, that is a reality. I would like to just jump to one subject and ask -- if I could ask a question. If you look at all the polls of what people are interested in and what issues they are really excited about, and we did the same thing with our own chamber executives in the big cities that we had together. We did a little polling thing. Education is at the top of the list. And yet education, particularly on the primary and secondary level, is a community-based responsibility. Cities, towns, the state, and yet Bill Clinton went out with his -- another deal like, you know, lets have one hundred thousand teachers, like the one hundred thousand policemen of whom eleven thousand are employed. And everybody, as they are looking up and down the polls, and if you look at all the exit polls, if you look at everything, education is up there. And it is at least twice the next issue. So how do we think about dealing with that issue, when, in fact, we could make a legitimate argument that for the most part it should be done by others. I mean if we put the federal government in a huge way into primary and secondary education, we will take a troubled system and leave it that way at three times the cost. FARIS: May I respond to that? DONOHUE:: I would like you to. FARIS: Again, we go back to we found that the great ideas, the innovations in this country, have primarily come because somebody in their garage or their basement or their father-in-law's attic came up with some little spin uniqueness. Let me give you and example about this education business. There is a woman in Greenville, Tennessee, Green County, been a school teacher for years. Very frustrated that she was seeing kids come through that were just being matriculated. Not because they learned anything, but because they became a certain age. She has come up with a very unique little program where a person who is not even a teacher, just someone who is good with children, assists a child between eighteen months and five years, on a computer for thirty minutes a week. And they have fun. And their motto is, Sarah's mother thinks she is learning, Sarah is just having fun. By the time this kid gets to five years old and goes to kindergarten, they can read. They can do math. Now our solution to that is, an example, Lipscomb University in Nashville, Tennessee. I will give you this as a specific example about what to do about education because I think we talk about education fifty thousand square feet and on the ground nothing happens. This is on the ground. So Lipscomb University is going to take their students who volunteer, Be Smart Kids is the name of this little company in Greenville. Be Smart Kids is going to train the students on how to coach and advise these little kids. They are going to have a professor who is a supervisor. They are going to have a motorcoach that goes to the projects in Nashville. Primarily and single parent moms on welfare, their little kids are home, before age five now, they are not in school. They bring them into the thing for thirty minutes a week. And that is all they want. Those kids are looking for it the next week. When is that truck coming. Now they come teach these kids. Now what happens if you take a child who live in the projects and can go into kindergarten and can read on the same level or better then the kid from that nice expensive home. What is that going to do for the whole educational ripple if you start back and where people learn. So I guess, Tom, for me is one. Take an example like Be Smart Kids and say how can we make that company be successful. Not for the richness of the stockholders, but because their success, look what it could do. Look at the thing Bill Brock, former Secretary of Labor, what Bill is doing with a company, and I don't remember the name of his company. But a company he is dealing is helping people in prisons. So the eighteen months to five years is to keep kids from ever getting to prison. But the people who get in prison, they are getting education. So I think for us we want to go to the private market. It is not so much charter schools as it is does a charter school work. Are we getting a problem solved. Our biggest problem in education is the teachers union. Because the one problem that Be Smart Kids is the teachers union don't like the idea and concept because there is a not a teacher teaching. Number one, there is not a teacher teaching. And number two, they don't like it because now they have got these kids coming to kindergarten who are smarter then the other kids and they can't deal with it. So they want to dumb them down and lets get everybody on the same average can't read level. Now as a teacher, I can show you how good a teacher I am. That is the biggest problem we have got. If, in fact, small business could have the support of the teachers unions, the teachers would win. They would benefit by all this. And so I think part of our challenge, just like Tom, I know you are meeting some union people, we have got to help them understand that having a program, even if it is for private, and it is doing the job, then lets promote that. The last thing is somebody in Washington, D.C., decides how Bountiful, Utah, should teach their kids English. And we already know the first name of ninety-two percent of everybody teaching economics. We do. In high school, eighth grade, civics. Do you know what their first name is? Coach. We have got to do a better job. ROGSTAD:: (Inaudible) there was meeting in the Chamber library of a group that we are all a part of, the Business Coalition for Education. And what it is trying to do is to say, wait a minute, can be begin to decide what is the critical aspects of some of these things that are working. And begin to -- begin to put some weight behind them and argue. I find there are some business terms and as business folks, we get reluctant to talk about competitions and others in school. The competition has got some positive aspects to it as well, in terms of accountability. To make sure that the students have some options. And that the schools have got some flexibility in terms of responsiveness.

And all -- I think, transcripts, worrying about where the resources are and school to work kinds of issues. There is some movement on here and I think there is a challenge and I think this organization, Jerry is a major player in, to really begin to say, wait a minute. Where do you put your voice here to make some progress. There is a shot. And I think it is worthy of all of us to keep thinking that through. I want to come back to two things that Jerry said and reinforce them. And it is the issue one economic growth. Lets stay on message and how we are relating to Washington. I think the real scary part of the debate, Jerry, is that economic growth in Washington right now is taken for granted. This is now the goose that is laying golden eggs. JASINOWSKI: That's the truth. ROGSTAD:: And it just keeps laying them. And everybody in this town assumes keep throwing sand in the gear and it is going to -- I'm mixing metaphors. It is going to keep laying eggs. BRANDT: I haven't been able to keep up with the metaphors. ROGSTAD:: And that is scary. It is very scary. And I, to be more specific on your point, the first thing you have got to do is stop the erosion. People forgetting. They take growth and competitiveness as a buzz word that now goes in a slogan and nobody thinks about it any more. Very, very hard. Secondly, your sense about work force, training, and the tax issue and I think you and I have talked about this before. So I'm sure you know the issue. Part of fundamental tax reform, and I think the thing that really takes taxes, in addition to your focus on the IRS, Jack, and brings it back in a way that is -- can be communicated to the citizenry, is this whole question of what economists call the human capital. We have spent years, all of us, arguing about the right treatment of investment and machinery and equipment. All tax reform proposals now say expense it. Well, if you really want to get labor interested in tax reform, talk about the right tax base in this country is the net return to capital and labor. Expensing and depreciation policies about getting the right net return to capital. What is the right net return to labor services? Expense all education and training outlays so that, in fact, you really get our tax base neutral with respect to people and capital in this country. That is an issue that can mobilize an awful lot of folks that don't think they have got a stake in tax reform. JASINOWSKI: I would like to just comment on that because I think you do set the predicate for all of the worker education issue exactly right, Barry, which is that we have got to talk more about the return to the individual -- from education and from other matters. And I think Tom is raising the question is really in some ways the number one question long term facing all of us. And I think we all have to work together, first and foremost, to advance this agenda. And I know we are and we should do more. I would just say, Tom, that there are three things that follow from the predicate of what Barry has said that seem to me to be fairly big leverage points on the education. The first, I think, is this whole constant focus and repetition on quality standards being applied to education. Just as we applied quality standards to our own companies in making the Malcolm Baldridge Quality Award standards central to the operation of all education. Secondly, I think an IRA for a lifetime learning, along the lines of what they have done in Britain, goes very much to the concept that you raised about trying to provide an incentive and full expensing for the investment in education necessary to get people to do more of it. And I think we can get around some of the voucher issue that has been so controversial. I think beyond that, (senator) Paul Coverdell's (R., Ga.) suggestion and other tax incentives in this general area is the way to go to increase education. And it is also the way to go to increase support for tax reform. And then, third, I do think that this new training bill, which gives a lot of the responsibility at the state levels, provides an opportunity for all of us in the states to be showing leadership with respect to how we use these training dollars in a way in which they really start doing something useful for our companies. So I'm encouraging my folks to get involved in setting the priorities for those state training activities, which is where we are going to make the improvements necessary. FARIS: Well I cut a deal with Delta I need to tell you about. I cut this deal with Delta Airlines and so far they have held up their end of the stick. And that is, that when it is time for my flight to leave, if I'm not there, it is okay to just go on without me. And we are getting ready to work that deal again here in a few minutes. But what I would like to do, if I could, is to thank you. This is a great Thanksgiving time, is to thank you for having this meeting. What I would also like, is we talk about what we don't like and what we want to change. I think it is really important for us, whether it is small business or big business, we need to be very, very thankful. I just came back from Sao Paulo, Brazil, for a small business congress. I'm going to tell you, with all of our faults, with our warts, America is the greatest place in the world to be able to start a business and stay in business. To be able to build a reputation and build a company and build something you are proud of. And we don't take the time to be thankful enough. And I know I'm one of the criticizers in this town. Throwing rocks in. But we are very thankful. And we are thankful that we have a form of government, the founding fathers decided if gridlock sounded pretty good. In most cases, we feel better if Congress is out of town then if they are in town. But we are very, very thankful that we have a country and a form and system of government that allows us to have the independence. Thanks again for letting me be here today. And I -- this is great. The first time the four of us have been together, Tom, since you have been on board. You all have either had meetings not inviting me or something. But the only meetings we have been to you have been busy in China or somewhere. I don't know. ROGSTAD:: Main Street. That is it. It was Main Street, Beijing. That was the only time.

DONOHUE:: Well, actually, I've been in one hundred and fifteen some cities. (Inaudible) many of them more than once. And so -- but will be around more. I just cheer you on. Keep doing it. FARIS: Thank you. Same here. ROGSTAD:: I'm just picking up on his comment. I think that while the economy may be slowing, this is still a remarkable period we are looking at in terms of the ability of this economy to sustain and improve the standard of living of our citizens. And I think from a policy standpoint, we talked two years ago. Tom wasn't here, but we all --look I'm sure you would have participated in that. The sense of a window of opportunity to get some things done on the back of what, in fact, is a very strong economy. That window is still there. I mean, in a very real sense, we sort of blew a couple of years here or wasted it. And it puts a little stronger imperative on tending to the nitty.

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